Local business executives, Aspire Johnson district leaders, officials from the US and Indiana Chambers of Commerce and Rep. Jefferson Shreve, R-Indiana, gathered for a round table of tax policy on Monday at Mashcraft Brewing in Greenwood. Noah Crenshaw | Daily journal
The provisions in a federal tax bill 2017 are set to expire later this year, and a local legislator is seeking reactions for a possible extension.
Rep. Jefferson Shreve, R-Indiana, in collaboration with the US Chamber of Commerce and Aspire Johnson County, held a round tax discussion on Monday at Mashcraft Brewing in Greenwood. The purpose of the discussion, where officials joined the Indiana Chamber of Commerce and nearly 20 small business owners from all over Johnson County and Southside, Indianapolis, was to discuss the extension of tax cuts approved by Congress in the 2017 tax reduction and jobs, which are set to expire until the end of the year.
The act of tax cuts and jobs of 2017 was signed in law by President Donald Trump early in his first administration. It was the biggest regulation of the tax code in three decades, giving tax cuts to individuals and businesses.
If Congress does not operate this year, federal tax rates will return to their highest levels. Lawmakers have the opportunity to extend or make permanent provisions of the law on tax reduction and jobs, which is part of the impulse after the roundtable. It is among the first of the 100 round tables to be held by the US Chamber of Commerce.
“As we consider a tax cut extension that will go to sunset this year if we do nothing, I go to this opinion that these are not tax cuts for the rich, that these are needed to provide a local living economy that promotes and encourages small business growth, development and employment, and investments in our businesses,” of space at 2022.
During the roundtable, business executives were asked how 2017 tax cuts affected their companies and if the cuts should be extended. Most attendees said the cuts should be extended.
As 2017 cuts affected businesses
As part of the 2017 tax reduction, corporate tax rate dropped from 35% to 21% – a decrease that is not expiring this year.
However, to keep things in a playing field for small businesses organized as “past entities”-no-level corporate tax levels, such as any income they receive individually-received a qualified business revenue discount, a 20% tax cut. The deduction of qualified business revenue is set to expire this year, said Greg Simons, a Simonsbitzer CPA and Associates.
“This would hurt businesses significantly because you start getting $ 100,000 in 20%profits, this is a tax discount of $ 20,000,” Simons said. “Then let’s say that the 30%rate, this is the different dollars we are talking about here, which will affect those businesses. So this is something that can go away.”
Other parts of the tax bill imposed to expire include tax cuts for households. A family that makes $ 50,000 a year can pay about $ 800 more in taxes and a $ 200,000 family can pay $ 5,000 more in taxes if cuts expire, Simons said.
Matt Caras, a partner at the Compass Pointe CPA in Greenwood, said there are restrictions on the 2017 law that ensure that they were not just the rich by receiving tax cuts. He also said crossings are becoming more common for businesses as S-corps are becoming “archaic” in nature. S-Corps, a business structure that allows corporations to exceed their income, loans and their direct deductions to their shareholders, are more needed for businesses that will have several shares classes.
Some business executives said tax reduction allowed them to increase. Brady Clements, owner of SPG ROOOFING & Exteriors in Whiteland and Indianapolis, used savings to invest more in his business and Erin Smith of Spotlight strategies based in Franklin technology for her business, an investment that has doubled their income since 2017, she said.
Two business owners said they became past units after the 2017 bill. John Merrill, the founder of the Merrill property group, expressed concern about the “accelerated tax options” about the housing they were leaving, which were critical to receiving new homes. Will Beach, managing partner of CMS Corp. In Bargersville, he told the roundtable that he was able to buy extra capital capital for tax savings.
Rodney Davis, head of the government’s Affraires for the US Chamber of Commerce, then redirected the conversation of how Congress would pass any extension of tax cuts in 2017.
-The new home budget law contains the conversation frame for possible cutting extension, and the Senate has gone through something similar, Shreve said. Now lawmakers have to gather to see what can be done. However, the thin majority in both rooms will make it more difficult to reach an extension agreement, he said.
“We have the opportunity to obtain significant tax legislation with reconciliation, but you have to carefully color the lines to make it happen,” he said. “And there is, there is a lot of discretion that is left in the hands of the Senate’s parliamentary, it is in an unsolved, but very influential position. The aspect of paying the cuts partially descends in determining the budget office of the Congress that marks what we can propose to do.”
Lawmakers will have to find a way to compensate for costs through various Congress committees, which will require savings, Shreve said.
The impact of new cuts
Business executives and officials also discussed the new amendments to the TRUMP Tax Code, including eliminating over time taxes, advice and social security. Shreve was demanding contribution if there were parts of the 2017 tax changes that “were less important” that could be replaced with new cuts in different areas, he said.
Phil Powell, a co -owner of Express employment professionals in Greenwood and Columbus, said the passage deductions allow the company to continue with the inflation to pay people better. Cut every new shortcut will result in the same thing, he said.
Andrew Castner, a co -owner of Mashcraft, said he felt removing a tips tax, along with over time, would be great for attracting and maintaining talent. Savings can improve business, he said.
However, John Lee, another Mashcraft co -owner, said he was worried if he would have a subtraction cap. It can help some industries attract talent because it will be more likely, but it can be harmful to small businesses that may not have so much resources.
Some business owners also expressed concern about the unintentional consequences of tax lifting for advice and overtime. Caras said businesses that usually do not use tips, such as a painter, can move on to use them if there were no taxes on them.
Tanya Cooper, owner of Midwest language services, asked how it could be fair for someone who is earning their income through tips to be tax free while everyone else would have to pay taxes.
“That doesn’t look right, and it would also encourage me to think about a way to make my system a tip system,” Cooper said.
Caras said a similar situation applies to overtime. If people decide not to hire as many people as possible and instead people work harder to save taxes, he wondered if this would reduce what could be done by providing businesses more incentives to hire people.
Other possible additions
Shifting concentration again to the 2017 expired tax cut, Jackie Ponder of Bowman Family Holdings brought “death tax” or property tax, which is imposed on inherited property. -The 2017 bill raised the ceiling for the assets tax from about $ 5 million to a height of about $ 14 million. Ponder was concerned about it falling back to $ 5 million when it sets this year.
“Most small businesses have children working there with them, and wealth is in things, not in cash balances,” Ponder said. “And so businesses break down. The farms break down and you can’t spend things to continue business. They are already taxed once, and now they are taxing again.”
Shreve also brought the stages of bonus depreciation, an additional first -year depreciation that aims to promote capital purchases by all business taxpayers. The 2017 law expanded the depreciation to the equipment used, although it should be “first use” from the purchase business. The rules allowed bonus depreciation at 100% for all qualified purchases made from September 27, 2017 and January 1, 2023, before dropping to 80% in 2023, 60% in 2024, 40% in 2025, 20% in 2026 and 0% in 2027, according to the American Bank.
Shreve believes that it should be allowed to continue. Mentioning his experience, he used the bonus depreciation to replace service trucks and invest in kiosks for his business, he said. Others in participation agreed that it should continue.
At the end of the discussion, Caras emphasized the need for security for any changes that come to the tax code sooner than later. Having an answer in December or even in 2026 may be harmful, he said.